Despite that setback, Town Manager Nathan Poore said the town has been working hard over the past several years to improve its business climate.

In the application to become a Certified Business Friendly Community, Poore identified several projects and programs that have been enacted to attract businesses to town. These programs include tax increment financing districts, an online database of available commercial properties and overlay zoning.

The state denied the town’s application in May. It said the town needs to update its Comprehensive Plan, better identify areas where permits may be needed (building permits, sign permits, business licenses, etc.) and better identify ways the town engages with businesses.

Town Council Chairwoman Faith Varney said she feels that in general the town is business friendly, and that in order to encourage business, the council should leave things in the Route 1 commercial district alone.

“The council wants businesses in the Route 1 and Route 100 areas and they are very happy to have them come, but they are not quite sure how they want to structure things,” she said. “Some of us think that we should leave it the way it is because there is already some structure in place.”

Jonathan Berry, president of the independent and non-governmental Falmouth Economic Development Commission, said the major problem the town has is a history of developing ordinances in response to problems that don’t exist.

“There is so much internal conflict within our code that it stymies economic growth,” he said. “When you look at our code, you don’t really need to do anything beyond look at the first page … there have been 66 amendments from 1986 to 2012. Not that all of those amendments effect business practices, but there are a lot of unintended consequences that flow from many of those amendments. Historically, we’ve responded to a perceived problem rather than working together to create business solutions for the future.”

Berry said the council needs to limit the number of negative restrictions – like the proposed footprint limit for businesses in the SB1 zoning district along Route 1.

Elizabeth Moss, owner of Elizabeth Moss Gallery in the Falmouth Shopping Center agreed, adding that a footprint limit that restricts the size of businesses not only effects businesses thinking about coming to Falmouth, but also the ones that are already in town.

The proposed ordinance, which the council was scheduled to discuss in a workshop on Wednesday night, limits business footprints to 50,000 square feet and could limit the flexibility of businesses to redistribute existing space, including the vacant, 52,000-square-foot former Shaw’s building at the Falmouth Shopping Center.

The council delayed a vote on the ordinance last month after the business community strongly encouraged a review of some aspects of the ordinance.

Moss, whose business has been the shopping center since 2004, said that without viable anchor stores, small businesses like hers will continue to struggle.

“I’m probably down 35 percent of where I would be if the center was full, maybe higher based on testimonial from my surrounding business owners who have been here longer,” she said.

Moss added that if the town wants to create a walkable, downtown district, it must re-envision the shopping center and work with businesses to bring new tenants into the space. This means not enacting ordinances that would limit the use of the space, she said.

Berry said the council’s attempts to create a business-friendly environment in Falmouth fall short because councilors do not listen to and work with businesses to create ordinances that work for everyone.

But Council Vice Chairwoman Bonny Rodden said the council has invited the business community to be a part of the process from the beginning, inviting business owners to committee meetings and ensuring they are aware of developments.

She also said that just saying the town is anti-business doesn’t make it so, and the council is making decisions for the future of the entire town, not just the business community.

“I don’t think that we are anti-business,” she said. “What we are trying to do here is to define our community so that in the long run we will attract more business because we have something special to offer.”